Note 4 - Investment Securities
 12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
Note
4
- Investment Securities
 
The amortized cost and fair value of investments, which were classified as
available for sale
, are as follows:
 
As of
December
31,
2016
 
(dollars in thousands)
 
Amortized
Cost
 
 
Gross
Unrealized
Gains
 
 
Gross
Unrealized
Losses
 
 
Fair Value
 
U.S. Treasury securities
  $
200,094
     $
3
     $
—
     $
200,097
  
Obligations of the U.S. government and agencies
   
83,111
      
167
      
(1,080
)
    
82,198
  
Obligations of state and political subdivisions
   
33,625
      
26
      
(121
)
    
33,530
  
Mortgage-backed securities
   
185,997
      
1,260
      
(1,306
)
    
185,951
  
Collateralized mortgage obligations
   
49,488
      
108
      
(902
)
    
48,694
  
Other investments
   
16,575
      
105
      
(154
)
    
16,526
  
Total
  $
568,890
     $
1,669
     $
(3,563
)
   $
566,996
  
 
 
As of
December
31,
2015
 
(dollars in thousands)
 
Amortized
Cost
 
 
Gross
Unrealized
Gains
 
 
Gross
Unrealized
Losses
 
 
Fair Value
 
U.S. Treasury securities
  $
101
     $
—
     $
(1
)
   $
100
  
Obligations of the U.S. government and agencies
   
101,342
      
470
      
(317
)
    
101,495
  
Obligations of state and political subdivisions
   
41,892
      
123
      
(49
)
    
41,966
  
Mortgage-backed securities
   
157,422
      
1,482
      
(215
)
    
158,689
  
Collateralized mortgage obligations
   
29,756
      
166
      
(123
)
    
29,799
  
Other investments
   
17,263
      
38
      
(384
)
    
16,917
  
Total
  $
347,776
     $
2,279
     $
(1,089
)
   $
348,966
  
 
 
 
The following table shows the amount of
available for sale
investment securities that were in an unrealized loss position at
December
31,
2016:
 
 
 
Less than 12
Months
 
 
12 Months
or Longer
 
 
Total
 
(dollars in thousands)
 
Fair
Value
 
 
Unrealized
Losses
 
 
Fair
Value
 
 
Unrealized
Losses
 
 
Fair
Value
 
 
Unrealized
Losses
 
Obligations of the U.S. government and agencies
   $
62,211
     $
(1,080
)
   $
—
     $
—
     $
62,211
     $
(1,080
)
Obligations of state and political subdivisions
   
24,482
      
(121
)
    
—
      
—
      
24,482
      
(121
)
Mortgage-backed securities
   
101,433
      
(1,306
)
    
—
      
—
      
101,433
      
(1,306
)
Collateralized mortgage obligations
    
35,959
      
(902
)
    
—
      
—
      
35,959
      
(902
)
Other investments
   
2,203
      
(93
)
    
11,895
      
(61
)
    
14,098
      
(154
)
Total
  $
226,288
     $
(3,502
)
   $
11,895
     $
(61
)
   $
238,183
     $
(3,563
)
 
The following table shows the amount of
available for sale
investment securities that were in an unrealized loss position at
December
31,
2015:
 
 
 
Less than 12
Months
 
 
12 Months
or Longer
 
 
Total
 
(dollars in thousands)
 
Fair
Value
 
 
Unrealized Losses
 
 
Fair
Value
 
 
Unrealized Losses
 
 
Fair
Value
 
 
Unrealized Losses
 
U.S. Treasury securities
  $
100
     $
(1
)
   $
—
     $
—
     $
100
     $
(1
)
Obligations of the U.S. government and agencies
   
49,759
      
(317
)
    
—
      
—
      
49,759
      
(317
)
Obligations of state and political subdivisions
   
18,725
      
(46
)
    
2,016
      
(3
)
    
20,741
      
(49
)
Mortgage-backed securities
   
55,763
      
(215
)
    
—
      
—
      
55,763
      
(215
)
Collateralized mortgage obligations
    
6,407
      
(85
)
    
2,436
      
(38
)
    
8,843
      
(123
)
Other investments
   
3,945
      
(238
)
    
11,810
      
(146
)
    
15,755
      
(384
)
Total
  $
134,699
     $
(902
)
   $
16,262
     $
(187
)
   $
150,961
     $
(1,089
)
 
Management evaluates the Corporation’s investment securities that are in an unrealized loss position in order to determine if the decline in fair value is other than temporary. The investment portfolio includes debt securities issued by U.S. government agencies, U.S. government-sponsored agencies, state and local municipalities and other issuers. All fixed income investment securities in the Corporation’s investment portfolio are rated as investment-grade or higher. Factors considered in the evaluation include the current economic climate, the length of time and the extent to which the fair value has been below cost, interest rates and the bond rating of each security. The unrealized losses presented in the tables above are temporary in nature and are primarily related to market interest rates rather than the underlying credit quality of the issuers or collateral. Management does not believe that these unrealized losses are other-than-temporary. The Corporation does not have the intent to sell these securities prior to their maturity or the recovery of their cost bases and believes that it is more likely, than not, that it will not have to sell these securities prior to their maturity or the recovery of their cost bases.
 
At
December
31,
2016,
securities having a fair value of
$119.4
million were specifically pledged as collateral for public funds, trust deposits, the FRB discount window program, FHLB borrowings and other purposes. The FHLB has a blanket lien on non-pledged, mortgage-related loans and securities as part of the Corporation’s borrowing agreement with the FHLB.
 
 
The amortized cost and fair value of
available for sale
investment and mortgage-related securities available for sale as of
December
31,
2016
and
2015,
by contractual maturity, are shown below. Expected maturities will differ from contractual maturities as borrowers
may
have the right to call or prepay obligations with or without call or prepayment penalties.
 
 
 
 
December 31, 201
6
 
(dollars in thousands)
 
Amortized
Cost
 
 
Fair
Value
 
Investment securities*:
                
Due in one year or less
  $
213,876
     $
213,885
  
Due after one year through five years...
    
40,335
      
40,270
  
Due after five years through ten years
   
45,840
      
44,914
  
Due after ten years
   
18,079
      
18,055
  
Subtotal
   
318,130
      
317,124
  
Mortgage-related securities
   
235,485
      
234,644
  
Total
  $
553,615
     $
551,768
  
 
*Included in the investment portfolio, but not in the table above, are mutual funds with a
n amortized cost and fair
value, as of
December
31,
2016
, of
$15.3
million and
$1
5.2
million,
respectively,
which have no stated maturity.
 
 
 
 
December 31, 2015
 
(dollars in thousands)
 
Amortized
Cost
 
 
Fair
Value
 
Investment securities*:
                
Due in one year or less
   $
9,570
     $
9,574
  
Due after one year through five years
    
61,368
      
61,467
  
Due after five years through ten years
    
53,193
      
53,070
  
Due after ten years
    
20,904
      
21,141
  
Subtotal
    
145,035
      
145,252
  
Mortgage-related securities
    
187,178
      
188,488
  
Total
   $
332,213
     $
333,740
  
 
*
Included in the investment portfolio, but not in the table above, are mutual funds with a
n amortized cost and fair
value, as of
December
31,
2015
, of
$15.6
million and
$1
5.2
million,
respectively,
which have no stated maturity.
 
 
Proceeds from the sale of
available for sale
investment securities totaled
$276
thousand,
$64.9
million and
$24.4
million for the
twelve
months ended
December
31,
2016,
2015
and
2014,
respectively. Net loss on sale of available for sale investment securities for the
twelve
months ended
December
31,
2016
totaled
$77
thousand. Net gain on sale of available for sale investment securities for the
twelve
months ended
December
31,
2015
and
2014
totaled
$931
thousand and
$471
thousand, respectively.
 
The amortized cost and fair value of investment securities
held to maturity
as of
December
31,
2016
are as follows:
 
As of
Dec
ember
3
1
,
2016
 
(dollars in thousands)
 
Amortized
Cost
 
 
Gross
Unrealized
Gains
 
 
Gross
Unrealized
Losses
 
 
Fair Value
 
Mortgage-backed securities
   $
2,879
     $
—
     $
(61
)
   $
2,818
  
Total
  $
2,879
     $
—
     $
(61
)
   $
2,818
  
 
The following table shows the amount of
held to maturity
securities that were in an unrealized loss position at
December
31,
2015:
 
 
 
Less than 12
Months
 
 
12 Months
or Longer
 
 
Total
 
(dollars in thousands)
 
Fair
Value
 
 
Unrealized
Losses
 
 
Fair
Value
 
 
Unrealized
Losses
 
 
Fair
Value
 
 
Unrealized
Losses
 
Mortgage-backed securities
   $
2,818
     $
(61
)
   $
—
     $
—
     $
2,818
     $
(61
)
Total
  $
2,818
     $
(61
)
   $
—
     $
—
     $
2,818
     $
(61
)
 
The amortized cost and fair value of
held to maturity
investment securities as of
December
31,
2016,
by contractual maturity, are shown below:
 
 
 
Dec
ember 3
1
, 2016
 
(dollars in thousands)
 
Amortized
Cost
 
 
Fair
Value
 
Mortgage-related securities
1
    
2,879
      
2,818
  
Total
  $
2,879
     $
2,818
  
 
1
Expected maturities of mortgage-related securities
may
differ from contractual maturities as borrowers
may
have the right to call or prepay obligations with or without call or prepayment penalties.
 
As of
December
31,
2015,
there were no investments
held to maturity
.
 
As of
December
31,
2016
and
December
31,
2015,
the Corporation’s investment securities held in
trading
accounts totaled
$3.9
million and
$4.0
million, respectively, and
consist solely of deferred compensation trust accounts which are invested in listed mutual funds whose diversification is at the discretion of the deferred compensation plan participants. Investment securities held in trading accounts are reported at fair value, with adjustments in fair value reported through income.